The Bankruptcy BlogBankruptcy and financial news2015-02-06T19:51:10Zhttp://www.totalbankruptcy.com/blog/feed/atom/WordPresslnasshttps://plus.google.com/u/0/111974141388750609374/http://www.totalbankruptcy.com/blog/?p=55272015-02-06T19:51:10Z2015-02-06T19:51:10ZAs many predicted, RadioShack Corp. has filed for bankruptcy protection.

In its petition, RadioShack listed $1.2 billion in assets and $1.39 billion in debts. The filing occurred in the U.S. Bankruptcy Court in Delaware.

Standard General will procure up to 2,400 of electronic retailer’s current 4,000 stores. Affiliate company General Wireless plans to partner with wireless operator Sprint to take over as many as 1,750 retail shops, according to the Wall Street Journal.

Sprint would essentially operate a store within a RadioShack store, offering "mobile devices across Sprint`s brand portfolio as well as RadioShack products, services and accessories," according to a statement made by Sprint.

RadioShack asked the U.S. Bankruptcy Court for approval to join with liquidation firm Hilco Merchant Resources to close the remaining retail stores. Domestic and international franchise stores will not be included in the restructuring.

DW Partners LP has agreed to finance RadioShack with roughly $285 million in bankruptcy financing, which will provide the company with an extra $20 million in borrowing ability.

According to the Wall Street Journal, employees at several RadioShack locations have been told by the company ship smartphones to nearby stores that would remain open in an effort to speed up the closing process.

Additionally, workers in some stores have been told to slash prices on smaller-ticket inventory.

Standard General had provided RadioShack with an undisclosed loan last year. However, the financial assistance was not great enough to carry the company while executives failed to persuade lenders and suppliers to renegotiate current agreements.

RadioShack posted losses in past 11 consecutive quarters. The company warned of a potential bankruptcy filing in a December securities filing.

As of late last year, RadioShack employed 24,000 people.

]]>0lnasshttps://plus.google.com/u/0/111974141388750609374/http://www.totalbankruptcy.com/blog/?p=55242015-01-19T21:46:02Z2015-01-19T21:46:02ZThe Wet Seal Inc. has filed for Chapter 11 bankruptcy protection in an attempt to save its remaining retail stores, according to an announcement made Friday.

The statement came just over a week after the teen clothing retailer stated it would be closing 338 locations and laying off 3,700 employees, roughly two-thirds its total chain. The bankruptcy filing listed assets of $10 million to $50 million and liabilities between $100 million and $500 million.

Similar mall-based retailers Delia’s Inc. and Deb Stores filed for Chapter 11 bankruptcy in December—further evidencing the impact cheap, fast-fashion stores like H&M and Forever 21 have in the current teen fashion marketplace.

Wet Seal started in 1962 as a bikini shack in Newport Beach, California. Canadian retailer Suzy Shier acquired the company in 1984. The company went public in 1990 and expanded over the decade with additions such as Arden B., Contempo Casuals and Zutopia. By 2001, all stores converted to the Wet Seal name.

The company restructured in 2013 after a long streak of issues. Retail-industry veteran John Goodman was brought in January 2013 to assist in refocusing the company after former CEO Susan McGalla was fired in July 2012.

Goodman stepped down September 2014 and Wet Seal was taken over by previous president and CEO Ed Thomas.

Additionally, Wet Seal ran into problems with an investment group that was displeased with its financial performance in 2012. In 2013 the retailer agreed to a $7.5 million settlement in a racial discrimination lawsuit filed by three former employees.

"Wet Seal failed for two reasons: a company that failed to stay in tune with their customers and new rivals like H&M that were able to get cooler merchandise to the stores quicker and with slightly better quality than Wet Seal," according to Brian Sozzi, CEO of Belus Capital Advisors.

A financing deal with investment bank B. Riley could help save some of Wet Seal’s business. They are in talks about a $20 million loan that could finance operations during the Chapter 11 bankruptcy process.

Wet Seal’s shares closed at 4 centers on Friday.

]]>0lnasshttps://plus.google.com/u/0/111974141388750609374/http://www.totalbankruptcy.com/blog/?p=55222015-01-15T17:30:51Z2015-01-15T17:30:51ZRadioShack Corp. is reportedly preparing to file for bankruptcy as early as February, according to a recent Wall Street Journal article.

Sources familiar with the situation spoke with the Wall Street Journal regarding the electronics chain’s recent financial situation. They confirmed a filing could come in the first week of next month.

Texas-based RadioShack is speaking with a private-equity firm that could potentially purchase its assets out of bankruptcy, according to the sources. However, these talks might not produce an agreement; sources stated RadioShack might attempt a traditional debt resolution method, such as bankruptcy.

The electronics chain has openly admitted it has been critically low on funds after posting losses in the last 11 quarters. RadioShack’s stock-market value has fallen to $50 million; on Wednesday, its shares dropped 13 percent to 41 cents each.

In December, RadioShack released a securities filing that warned it could be pushed into bankruptcy court if it was unable to raise new funds or receive assistance from lenders.

The securities filing reported RadioShack had $62.6 million as of November 1: $43.3 million in cash and $19.3 in borrowing accessibility.

Chief Executive Joe Magnacca unsuccessfully attempted to overhaul the company as a smartphone repair store. Almost three years of straight losses forced RadioShack to seek debt investors in order to stay in business.

RadioShack has been attempting to close 1,100 of its 5,000 stores since March 2014 but have failed to raise the funds to do so: only 175 stores have closed since the end of last October.

The 94-year-old chain began in the 1920s in Boston, first selling transistor radios and typewriters. The retailer became an American icon over the years but became irrelevant in recent years with the rise of technology and the internet.

As of late 2014, 24,000 people are employed by RadioShack.

]]>0lnasshttps://plus.google.com/u/0/111974141388750609374/http://www.totalbankruptcy.com/blog/?p=55202014-12-22T19:46:51Z2014-12-22T19:46:51ZCasino and entertainment company Caesars Entertainment Corp will be filing for bankruptcy next month in an attempt to cut its growing debt.

Caesars signed what is known as a lock-up agreement with its bondholders on Friday, consenting to place its greatest unit, Caesars Entertainment Operating Co (CEOC), into Chapter 11 bankruptcy in mid-January—by January 15 at the latest.

The proposed filing for Chapter 11 bankruptcy protection will decrease Caesar’s current debt of $18.4 billion to roughly $8.6 billion, according to the company.

On Monday, Caesars Entertainment Corp announced it will acquire affiliate Caesars Acquisition Co in an all-stock agreement. This procurement will allow the company to restructure its $18.4 billion debt without seeking outside financing.

Other portions of the Las-Vegas based company, Caesars Entertainment, Caesars Entertainment Resort Properties and Caesars Growth Partners, will not be included in the bankruptcy process, according to CEOC.

One term of the lock-up agreement is that a particular percentage of first-lien bondholders must sign the contract before Caesars is prepared to file bankruptcy papers. Caesars must receive approval from other senior creditors in order to meet voting requirements to approve a bankruptcy plan before a judge can approve

CEOC plans to divide its U.S.-based enterprises into two separate companies: an operating firm and a publicly traded real estate investment trust that will maintain a recently formed property company.

By splitting the aforementioned assets, CEOC will cut its annual interest expense by 75 percent.

Caesars was weighed down with debt after the company was made private for $30.7 by Apollo Global Management LLC and TPG Capital in 2008. The deal occurred before the credit crisis and part of a buyout; Caesar’s has lost money every year since 2009.

Friday’s closing price for Caesars Entertainment was $1.22 billion, or $8.96 per share.

]]>0lnasshttps://plus.google.com/u/0/111974141388750609374/http://www.totalbankruptcy.com/blog/?p=55142014-12-15T22:50:22Z2014-12-15T22:50:22ZA Florida based flea market has filed for Chapter 11 bankruptcy due to a three-year lawsuit with Coach over alleged sales of counterfeit items.

Visitors Flea Market filed for bankruptcy protection in part to protect an awaiting sale of the entire business for $5.1 million to Treasure Island Real Estate Partners. After the death of founder and owner Delroy Josephs in November 2013, family members have disagreed over the sale of the business.

Federal agents raided the flea market in December of 2011, as per documents filed in the Coach lawsuit. Coach claimed over 500 counterfeit purses and other items were being sold at stands throughout the market.

Coach is seeking maximum damages for alleged willful violation of trademark laws: each violation could potentially cost up to $2 million a piece.

Investigators for the leather goods company toured the Visitors Flea Market months before the raid; they handed out letters ordering vendors to stop selling the alleged counterfeit merchandise.

Coach accused Josephs of knowing about the knockoffs being sold, but he denied the allegations. According to bankruptcy documents, a settlement agreement was signed by an attorney for Josephs’ estate six months after his passing. The settlement amount was not revealed.

Julio Batista, one of the market’s vendors, signed an affidavit in 2011 that he witnessed a salesman distributing counterfeit Coach purses; the man was identified as the “Chinese Man.” Batista claimed he did not know the items were knockoffs.

“The items displayed at my booth were sold to me through a Chinese Man that comes weekly to the flea market and sells these items in cash,” according to Batista’s affidavit. “This is a very common type of business for a small flea market business.”

Two companies related with the market specifically filed for bankruptcy: the owner and operator, Visitors Flea Market Inc., and a separate leasing company that rented out over 250 vendor booths.

Visitors Flea Market provided a general range of its debt in filing documents—between $1 million and $10 million.